R.A.

8792

"An Act Providing For The Recognition And Use of Electronic Commercial And Non-Commercial
Transactions, Penalties For Unlawful Use Thereof, And Other Purposes, also known as the
"Electronic Commerce Act."

In its Declaration of Policy (Section 2), it is declared that "The State recognizes the vital role of
information and communications technology (ICI) in nation building. The Objective and Sphare
of Application of the new law are as hereunder stated:

Sec. 3. Objective - This Act aims to facilitate domestic and international dealings, transactions,
arrangements, agreements, contracts and exchanges and storage of information through the
utilization of electronic, optical and similar medium, mode, instrumentality and technology to
recognize the authenticity and reliability of electronic data messages or electronic documents
related to such activities and to promote the universal use of electronic transactions in the
government and by the general public. Sec. 4. Sphere of Application - This Act shall apply to
any kind of electronic data message and electronic document used in the context of commercial
and non-commercial activities to include domestic and international dealings, transactions,
arrangements, agreements, contracts and exchanges and storage of information.

The new law defines in Section 5 thereof what constitutes "electronic data message", "electronic
signature" and "electronic document", as follows:

c) "Electronic data message" refers to information generated, sent, received or stored by

electronic, optical or similar means.

e) "Electronic signature" refers to any distinctive mark, characteristic and/or sound in electronic
form, representing the identity of a person and attached to or logically associated with the
electronic data message or electronic document or any methodology or procedures employed or
adopted by a person and executed or adopted by such person with the intention of
authenticating or approving an electronic data message or electronic document.

f) "Electronic document" refers to information or the representation of information, data, figures,

symbols or other modes of written expression, described or however represented, by which a
right is established or an obligation extinguished, or by which a fact may be proved and
affirmed, which is received, recorded, transmitted, stored, processed, retrieved or produced
electronically.

A) Legal Recognition / Admissibility As Evidence

The new law gives legal recognition to electronic data messages, electronic documents and
electronic signatures.

Thus, Section 6, 7 and 8 provides:

Sec. 6. Legal Recognition of Electronic Data Message - Information shall not be denied validity
or enforceability solely on the ground that it is in the form of an electronic data message
purporting to give rise to such legal effect, or that it is merely incorporated by reference in that
electronic data message.
Sec. 7. Legal Recognition of Electronic Documents - Electronic documents shall have the legal
effect, validity or enforceability as any other document or legal writing, and

(a) Where the law requires a document to be in writing, that requirement is met by an electronic
document if the said electronic document maintains its integrity and reliability and can be
authenticated so as to be usable for subsequent reference, in that -
i) The electronic document has remained complete and unaltered, apart from the
addition of any endorsement and any authorized change, or any change which arises in
the normal course of communication, storage and display; and
ii) The electronic document is reliable in the light of the purpose for which it was
generated and in the light of all relevant circumstances.
(b) Paragraph (a) applies whether the requirement therein is in the form of an obligation or
whether the law simply provides consequences for the document not being presented or
retained in its original form. (c)Where the law requires that a document be presented or retained
in its original form, that requirement is met by an electronic document if -
i) There exists a reliable assurance as to the integrity of the document from the time
when it was first generated in its final form; and
ii) That document is capable of being displayed to the person to whom it is to be
presented: Provided, That no provision of this Act shall apply to vary any and all
requirements of existing laws on formalities required in the execution of documents for
their validity.

For evidentiary purposes, an electronic document shall be the functional equivalent of a written
document under existing laws.

This Act does not modify any statutory rule relating to the admissibility of electronic data
messages or electronic documents, except the rules relating to authentication and best
evidence.

Sec. 8. Legal Recognition of Electronic Signatures - An electronic signature on the electronic

documents shall be equivalent to the signature of a person on a written document if the
signature is an electronic signature and proved by showing that a prescribed procedure, not
alterable by the parties interested in the electronic document, existed under which -

a) A method is used to identify the party sought to be bound and to indicate said party’s access
to the electronic document necessary for his consent or approval through the electronic
signature; b) Said method is reliable and appropriate for the purpose for which the electronic
document was generated or communicated, in the light of all circumstances, including any
relevant agreement; c) It is necessary for the party sought to be bound, in order to proceed
further with the transaction, to have executed or provided the electronic signature; and d) The
other party is authorized and enabled to verify the electronic signature and to make the decision
to proceed with the transaction authenticated by the same.

The foregoing provisions put at rest the legal debate on whether or not Philippine Courts will
accept electronic contracts or documents as evidence.
The Rules of Court (Rules 128-134) govern court procedures and processes. Rule 130, at
Section 2 of the same, provides that documentary evidence are "those which consist of writings
or any material containing letters, words, figures, symbols, or other modes of written
expressions offered as proof of its contents." Are electronically generated data or documents
covered under the said Rules?

The Supreme Court, in a sedition case (People vs. Burgos, 200 SCRA 67), had occasion to rule
on whether evidence submitted in electronic form could be admissible as evidence. Burgos
argued that the evidence – contained in diskettes – which the military had sought to introduce
against him could not be admissible as the military could have tampered with it. The judge in the
lower court agreed with him and disallowed the presentation of the evidence. In the Supreme
Court, the lower court was reversed and was directed to admit the evidence. But instead of
ruling, however, on whether an electronic –generated evidence was admissible or not, it relied
on the presumption of regularity in the performance of public service. It allowed the introduction
of the evidence on the ground that there was no showing that the military had tampered with the
diskette. Thus, the issue of electronically generated documents/data as evidence was not
squarely decided upon.

The new law now expressly provides that for evidentiary purposes, an electronic document shall
be the functional equivalent of a written document under existing laws. Under this principle of
"functional equivalent" any electronic data message, document or signature, which is the
functional equivalent of a written document or original signature, it is now clearly admissible as
evidence. The operative words for admissibility are "integrity", "reliability" and "can be
authenticated". Thus, Sections 10 and 11 of the new law provides:

Sec. 10. Original Documents - (1) Where the law requires information to be presented or
retained in its original form, that requirement is met by an electronic data message or electronic
document if:

a) the integrity of the information from the time when it was first generated in its final form, as an
electronic data message or electronic document is shown by evidence aliunde or otherwise; and
b) where it is required that information be presented, that the information is capable of being
displayed to the person to whom it is to be presented.

(2) Paragraph (1) applies whether the requirement therein is in the form of an obligation or
whether the law simply provides consequences for the information not being presented or
retained in its original form.

(3) For the purposes of subparagraph (a) of paragraph (1):

a) the criteria for assessing integrity shall be whether the information has remained
complete and unaltered, apart from the addition of any endorsement and any change
which arises in the normal course of communication, storage and display; and
b) the standard of reliability required shall be assessed in the light of the purpose for
which the information was generated and in the light of all the relevant circumstances.
Sec. 11. Authentication of Electronic Data Messages and Electronic Documents - Until the
Supreme Court by appropriate rules shall have so provided, electronic documents, electronic
data messages and electronic signatures, shall be authenticated by demonstrating,
substantiating and validating a claimed identity of a user, device, or another entity in an
information or communication system, among other ways.

The new law further provides in Section 12 thereof that electronic messages and electronic
documents are admissible and have evidential weight. Thus:

Sec. 14. Admissibility and Evidential Weight of Electronic Data Messages or Electronic
Documents - In any legal proceedings, nothing in the application of the rules on evidence shall
deny the admissibility of an electronic data message or electronic document in evidence -

a. On the sole ground that it is in electronic form; or

b. On the ground that it is not in the standard written form, and the electronic data message or
electronic document meeting, and complying with the requirements under Sections 6 or 7 hereof
shall be the best evidence of the agreement and transaction contained therein.

In assessing the evidential weight of an electronic data message or electronic document, the
reliability of the manner in which it was generated, stored or communicated, the reliability of the
manner in which its originator was identified, and other relevant factors shall be given due
regard.

(a) Carriage Of Goods

With reference to electronic commerce in carriage of goods, the new law provides in Section 26
thereof that "where the law requires that any action (in connection with a contract of carriage of
goods) be carried out in writing or by using a paper document, that requirement is met if the
action is carried out by using one or more electronic data or electronic documents." Thus,
electronic messages or electronic documents may be used as "functional equivalents" of written
or paper documents in connection with the following instances:

a) i) furnishing the marks, number, quantity or weight of goods;

ii) stating or declaring the nature or value of goods;
iii) issuing a receipt for goods;
iv) confirming that goods have been loaded;

b)

i) notifying a person of terms and conditions of the contract

ii) giving instructions to a carrier;

c)

i) claiming delivery of goods;

ii) authorizing release of goods;
iii) giving notice of loss, or damage to goods;
 d) giving any other notice or statement in connection with the performance of the
contract;

e) undertaking to deliver goods to a named person or a person authorized to claim

delivery;

f) granting, acquiring, renouncing surrendering, transferring or negotiating rights in

goods;

g) acquiring or transferring rights and obligations under the contract.

(b) Electronic Transactions In Government

The new law mandates in Section 27 thereof that Government, within two (2) years from
the date of effectivity of the Act, must accept/use electronic data messages, electronic
documents and electronic signatures. Thus:

SEC. 27. Government Use of Electronic Data Messages, Electronic Documents and
Electronic Signatures. – Notwithstanding any law to the contrary, within two (2) years
from the date of the effectivity of this Act, all departments, bureaus, offices and agencies
of the government, as well as all government-owned and controlled corporations, that
pursuant to law require or accept the filing of documents, require that documents be
created, or retained and/or submitted, issue permits, licenses or certificates or
registration or approval, or provide for the method and manner of payment or settlement
of fees and other obligations to the government, shall-

a) accept the creation, filing or retention of such documents in the form of electronic data
messages or electronic documents;

b) issue permits, licenses, or approval in the form of electronic data messages or

electronic documents;

c) require and/or accept payments, and issue receipts acknowledging such payments,
through systems using electronic data messages or electronic documents; or

d) transact the government business and/or perform governmental functions using

electronic data messages or electronic documents, and for the purpose, are authorized
to adopt and promulgate, after appropriate public hearing and with due publication in
newspapers of general circulation, the appropriate rules, regulations, or guidelines, to
among others, specify-

 the manner and format in which such electronic data messages or electronic documents
shall be filed, created, retained or issued;
 where and when such electronic data messages or electronic documents have to be
signed, the use of an electronic signature, the type of electronic signature required;
 the format or an electronic data message or electronic document and the manner the
electronic signature shall be affixed to the electronic data message or electronic
document;
  the control processes and procedures as appropriate to ensure adequate integrity,
security and confidentiality of electronic data messages or electronic documents or
records or payments;
 other attributes requires of electronic data messages or electronic documents or
payment; and
 the full or limited use of the documents and papers for compliance with the government
requirements: Provided, That this Act shall by itself mandate any department of the
government, organ of state or statutory corporation to accept or issue any document in
the form of electronic data messages or electronic documents upon the adoption,
promulgation and publication of the appropriate rules, regulations, or guidelines.

(c) Confidentiality

Section 32 of the new law underscores the obligation for confidentiality. Thus:

Section 32. Obligation of Confidentiality. – Except for the purposes authorized under this
Act, any person who obtained access to any electronic key, electronic data message or
electronic document, book, register, correspondence, information, or other material
pursuant to any powers conferred under this Act, shall not convey to or share the same
with any other person.

(d) Illegal Activities / Penalties

To protect internet users, consumers and owners of computer systems / servers and
copyright owners, the new law defines what constitutes illegal activities and provides
penalties thereof. Thus:

SEC. 33. Penalties. – The following Acts shall be penalized by fine and/or imprisonment,
as follows:

a. Hacking or cracking which refers to unauthorized access into or interference in a

computer system/server or information and communication system; or any access in order to
corrupt, alter, steal, or destroy using a computer or other similar information and communication
devices, without the knowledge and consent of the owner of the computer or information and
communications system, including the introduction of computer viruses and the like, resulting in
the corruption, destruction, alteration, theft or loss of electronic data messages or electronic
documents shall be punished by a minimum fine of One Hundred Thousand Pesos
(P100,000.00) and a maximum commensurate to the damage incurred and a mandatory
imprisonment of six (6) months to three (3) years;
b. Piracy or the unauthorized copying, reproduction, dissemination, distribution,
importation, use, removal, alteration, substitution, modification, storage,
uploading, downloading, communication, making available to the public, or
broadcasting of protected material, electronic signature or copyrighted works
including legally protected sound recording or phonograms or information
material on protected works, through the use of telecommunication networks,
such as, but not limited to, the internet, in a manner that infringes intellectual
property rights shall be punished by a minimum fine of One Hundred Thousand
Pesos (P100,000.00) and a maximum commensurate to the damage incurred
and a mandatory imprisonment of six (6) months to three (3) years;
c. Violation of the Consumer Act or Republic Act No. 7394 and other relevant or
pertinent laws through transactions covered by or using electronic data
messages or electronic documents, shall be penalized with the same penalties
as provided in those laws;
d. Other violations of the provisions of this Act, shall be penalized with a maximum
penalty of One Million Pesos (P1,000,000.00) or six (6) years imprisonment.